Landlords spend a great deal of time, effort, and money trying to find the ideal tenants for their rental units. In most cases, landlords are having complete strangers move into their homes. Marketing the property, reviewing applications, screening credit and background histories, checking references, and negotiating appropriate lease terms are all necessary steps to decrease the risk of poor tenants, evictions, and vacancies. Even then, applicants who look perfect on paper may still turn out to be terrible tenants.
What many landlords seem to ignore is dedicating the same effort to retaining high quality tenants. Think about it. These tenants are no longer strangers in the sense that there is history of them paying rent on time, taking care of the property, and being respectful to neighbors. The risk is now much less than when they were applicants.
Landlords often make the mistake of thinking that just by doing their duties as defined in the lease, good tenants will stay.
No! Go above and beyond to retain them!
In a prior article, 7 Ways to Make Your Landlord Appreciate You, we provided tips to tenants on how to get in their landlords’ good graces. As we know, a harmonious landlord-tenant relationship must be a two-way street so how about on the landlord side? What can landlords do to keep good tenants?
- Be a Good Landlord
First, the obvious. I won’t spend much time on this one in this article.
-Stay on top of maintenance/repairs
-Educate tenants on rules and expectations
Check out The Consensus Top Landlord Mistakes for more tips.
- Be Santa Claus – Bring Gifts
No, you don’t need to grow a belly and beard (unless you want to). However, you should reward good tenants periodically with small gifts. Make them feel special.
During your next inspection, bring a bottle of wine for your tenants. People appreciate wine because even if they don’t drink it, it’s easy to re-gift. The inspection is a good time to do this since it’s a scheduled meeting. You’re not randomly showing up to the apartment, which some tenants consider to be intrusive.
During the holidays, send your tenants a gift card to use at a coffee shop, bakery, or grocery store.
Give your tenants’ kids something playful like a funny t-shirt or a stuffed animal. Parents are happy when their kids are happy.
You will be surprised how much appreciation your tenants will show for things that do not require much effort on your part.
Oh, did you know these gifts are tax deductible? The IRS limits the allowable business expense to just $25 per person per year, but hey, why not write it off? You’ll also find you probably won’t be spending much more than that, especially if you have multiple tenants living in the same unit.
- Be Slickdeals – Find Discounts
Slickdeals.net is my favorite deals site. Whenever I need to buy anything, I search there first to see where the discounts are. I’ve saved quite a bit by taking this extra minute before making a purchase. Do this search for your tenants by creating a list of local businesses that offer discounts. It’s also a great way to welcome new tenants to the neighborhood.
Do you personally know local business owners? Even if you don’t, stop by local shops and ask if they would be willing to offer discounts to your tenants. Businesses are incentivized to say yes because local customers are more likely to be loyal and also refer their friends through word of mouth.
Some local businesses to target are pizzerias, flower shops, fitness studios, boutique cafes, and neighborhood restaurants. If they say no, then *shrugs*, oh well. There is no harm in trying.
Better yet, are you a business owner yourself? Offer your tenants discounts. I recall a story from a landlord who also owned a pizzeria. His tenants loved pizza so he gave them a generous discount and they ordered from his restaurant all the time. The tenants’ appetites were happily satisfied (it’s pizza!) and the landlord generated additional revenue for his business. Win, win.
- Be Miss Cleo – Predict Appliance Failures
Does Miss Cleo have psychic powers? Not according to the Feds. Thankfully, predicting appliance failures doesn’t require psychic powers. For each major appliance, keep track of its age, remaining life expectancy, warranty terms, and note prior issues. This will help you anticipate repairs and prioritize which appliances to upgrade next.
Pro-actively upgrade appliances that generally don’t work well or are nearing the end of their lifecycles. Don’t wait for something to break down completely before you do anything about it. Your tenants will appreciate that you are taking initiative.
Old appliances can end up costing more because they lack efficiency and increase the household’s energy cost. Plus, safety is also a big concern.
Some appliances (or parts in them) to consider upgrading are the air conditioner, dishwasher, washing machine, dryer, refrigerator, microwave, carpeting/flooring, and lighting.
A good time to evaluate whether upgrades are needed is near the end of the lease. You can justify a portion of the rent increase to capital improvements. Tenants are more receptive to the rent increase when they see upgrades made directly to their home.
- Ask Jeeves – Ask Tenants What They Want
Remember that search engine (more like a gimmick) from the late 90s that got pretty popular? You type in a question and ‘Jeeves’ is supposed to provide answers. Except you usually never get a straight answer and are likely to see results that are totally irrelevant to what you asked.
I promise that your tenants’ answers will be more direct than Jeeves’.
For some reason, landlords don’t simply ask their tenants what they want in order for them to renew their lease. Take the guess work out of it. Set expectations so that tenants know a full kitchen renovation probably isn’t realistic. It may surprise you to hear requests that you consider to be trivial but tenants actually value a lot.
Landlords, what retention methods do you use to keep good tenants?
Tenants, which incentives would you appreciate the most?